Thursday, July 3, 2008

The Mess That Greenspan Made blog:An odd choice of images for the new FDIC ad -- The irony of this new FDIC [Federal Deposit Insurance Corp.] ad amid soaring inflation around the world, rising gold prices, and hyper-inflation in Zimbabwe (where you see similar looking currency) is quite rich.

Today the price of gold closed at $933.20 per oz.So today, 2,857.14 oz's of gold at $933.20 per oz. is worth $2,666,285.72 U.S. dollars.

That is about a 4.42% annual increase in the dollar price of gold in the 74 1/2 years since 1934. That would be pretty good estimate of the average annual rate of inflation over the last 74.5 years.

On December 31, 2002 the price of gold was $346.70. The gold standard would imply that inflation has been running at an annual rate of 18.14% over the last 5 1/2 years.

Numbers for thought.

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Froma Harrop / Real Clear Markets:The Politics of Foreclosure -- What are the politics of the housing meltdown? Foreclosure agony is undoubtedly a campaign issue, but the political question remains: What do the voters want their leader to do about it? Then there's the economic question: What can a president do about it -- other than ask taxpayers to bail out people who took on more debt than they could handle? ...

McCain has called on the Federal Housing Administration to direct some borrowers into lower-cost, government-backed mortgages. He's offering to spend $10 billion aiding subprime borrowers....

Barack Obama would do more. He'd put $10 billion into a fund to prevent foreclosures. And he'd give another $10 billion to cities to buy foreclosed houses....

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LA Times:LA Land - Ghosts Towns in 'Inland Empire' -- financial analyst fresh from a tour of construction sites in the Inland Empire is warning Wall Street of a "ghost town" where finished homes sit vacant and additional homes are still under construction.

"At several properties, there were a significant number of fully built homes sitting vacant along with a large number of additional homes still under construction," Sandler O'Neill & Partners analyst Aaron Deer wrote today after touring developments in Corona and Ontario. "At one master plan community, the entire development appeared to be vacant -- with the exception of crews working on new construction, it was a ghost town." ...

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Bradenton Herald [Florida]:NAACP protests against subprime loans -- Local and national black leaders called on subprime lenders Wednesday to reform their lending practices, contending minorities have been discriminated against.

In a series of events across the country, the National Association for the Advancement of Colored People launched an initiative against subprime and other lenders. The goal: To pressure lenders to make amends for past discriminatory practices and to abolish them altogether.

"Starting today, the NAACP is starting to take action," Edward Bailey, president of the organization's Manatee County branch, said Wednesday. "This is not going to be just a one-time thing."

At rallies from Baltimore to Seattle, NAACP officials cited several studies that said blacks were more likely to receive subprime loans - those with higher interest rates and other costs - than whites...

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LA Times:California Senate passes mortgage default warning bill -- he first major bill designed to help prevent more home foreclosures in California won final passage from the state Senate on Wednesday and was sent to the governor, who was expected to sign the measure into law.

The legislation, which passed on a 32-8 vote, would require lenders to give homeowners more -- and earlier -- warnings that their home loans were heading toward default. The bill, SB1137, would take effect immediately once it had the signature of Gov. Arnold Schwarzenegger.

The bill also gives renters more time to find a new place to live when they are being evicted because their landlord is losing the property.

A third provision authorizes local governments to force lenders to maintain property that is sitting empty after a foreclosure...